WakeMed CEO leaves amid challenging health care landscape
Posted September 27, 2013
Updated October 2, 2013
Raleigh, N.C. — WakeMed Health & Hospitals faces challenges as the Affordable Care Act reshapes the U.S. health care industry, and the hospital system must now address those challenges while also hunting for a new leader.
President and Chief Executive Bill Atkinson agreed Wednesday to step down, citing "differences in the future direction of the organization," officials said Thursday. He had led WakeMed since 2003.
"There's a lot of pressure on hospitals right now, especially nonprofits like WakeMed with razor-thin profit margins," said David Ridley, health sector management faculty director at Duke University's Fuqua School of Business.
The Affordable Care Act only steps up the competition among hospitals for physicians, patients and insurance reimbursements – competitions that WakeMed has struggled with in recent years.
Almost three years ago, WakeMed suffered a blow when a cardiology practice, Wake Heart and Vascular, shifted much of its business to the hospital's crosstown rival, Rex Healthcare.
"When WakeMed lost those cardiologists, that really hurt because they lost the lucrative services that were subsidizing the less lucrative," Ridley said.
A few months later, WakeMed made a surprise $750 million bid for Rex, with Atkinson saying that efficiencies of scale were needed.
"The cost of health care is beyond the reach of almost all of us," he said at the time.
Atkinson also criticized state support of Rex, which is operated by UNC Healthcare, saying that left WakeMed at a competitive disadvantage. Rex officials argue that the hospital system receives no taxpayer funding and also generated enough revenue to send money back to UNC.
WakeMed withdrew its takeover bid last year as part of a deal brokered by state lawmakers that called, in part, for Rex to provide more psychiatric treatment to lessen WakeMed's indigent care load.
WakeMed provides about two-thirds of the indigent care services in Wake County, and Ridley said lawmakers' decision this year not to expand Medicaid under the Affordable Care Act also hurt the hospital.
"Because they have charity care coming in, that would be paying care if we had the Medicaid expansion," he said.